ePolicy News December 2012

With the November elections over, Congress seeks to work out a compromise to avert the fiscal cliff. On Jan. 1, the Bush tax cuts will expire, increasing annual tax assessments by roughly $600 billion. In addition, federal government programs are set to undergo sequestration—a combination of automatic cuts—of approximately $120 billion in CY 2013. If the combination—the so-called “fiscal cliff”—goes into effect, many economists project the U.S. economy could go back into a recession. According to the Congressional Budget Office, the combination of these cuts, coupled with the expiration of the Bush tax cuts, is expected to reduce economic growth by 4 percent, enough to throw the country into a recession.

The Office of Management and Budget has said that “sequestration would be deeply destructive to national security, domestic investments, and core government functions.” The sequester would cut nonexempt defense programs by 9.4 percent; nondefense discretionary programs—including scientific grants, workforce training, and education programs—by 8.2 percent, and mandatory domestic programs (based on eligibility) by 7.6 percent. In addition, the flawed Sustainable Growth Rate (SGR) is scheduled to trigger a 26.5-percent cut in the Medicare Physician Fee Schedule, although Congress has regularly reversed these cuts in the past. Medicare payment programs, including the Physician Fee Schedule and the Clinical Laboratory Fee Schedule, are slated for an additional 2-percent cut.

While compromise on a long-term solution to address the federal deficit has long been elusive, the prospects now seem somewhat better. In the past, Congressional Republicans have refused to agree to any budget deal that includes tax increases, and Congressional Democrats have refused proposals that place the bulk of a deficit reduction effort on cuts in federal spending, particularly nondefense domestic programs. Since the election, a number of prominent Republicans have indicated willingness to consider increases in tax revenues as part of a deal to avert the fiscal cliff.

As policymakers work to avert the fiscal cliff, laboratory professionals should be aware that among the priorities is some sort of fix, most likely temporary, to prevent the SGR-related cuts to the Medicare Physician Fee Schedule. But as policymakers work on these issues, pathologists and other laboratory professionals should understand that Congress is looking for areas of the federal budget where it can find savings. ASCP and its allies have identified Congressional reform of the Stark Self-Referral Law’s in-office ancillary services exception as one potential area for savings; however, we should all keep in mind that Congress has, in the recent past, considered imposing a co-pay, or cutting the Clinical Laboratory Fee Schedule, as another way to address the budget deficit.

As Congress considers these issues, ASCP will be proactive in our efforts to ensure that the voices of America’s laboratory workforce are heard.

ASCP and members of the Clinical Laboratory Coalition recently wrote U.S. House and U.S. Senate leadership, urging them to protect patient access to clinical laboratory services as Congress works to avert a deficit. Their letter implored Congressional leaders not to impose cost-sharing on Medicare beneficiaries or further cuts in the Clinical Laboratory Fee Schedule (CLFS), which has been cut by about 25 percent already in recent years. The former would increase out-of-pocket Medicare costs on patients, and would disproportionately impact those least able to afford it since these costs may ultimately be borne by Medicare Part B Supplemental Insurance programs.

The letter noted that cuts to the CLFS “include a cumulative 20 percent reduction implemented through the Affordable Care Act; another 2-percent cut to the laboratory fee schedule as a result of the short-term Sustainable Growth Rate (SGR) deal passed in February of this year (representing 15 percent of the offset to pay for the SGR deal); and another 2-percent cut to Medicare laboratory services through sequestration.”

Signatories of the letter were ASCP, the American Clinical Laboratory Association, American Association for Clinical Chemistry, American Association of Bioanalysts, American Medical Technologists, Clinical Laboratory Management Association, and National Independent Laboratory Association.

The Health Resources and Services Administration’s (HRSA) Council on Graduate Medical Education recently convened an expert panel to review recommendations that address reform and financing of Graduate Medical Education (GME) in the United States.

The Council is formalizing its recommendations, which are expected to be presented to Congress in January 2013. Panelists primarily focused on financing, mindful of HRSA’s essential four goals to improve access to quality care and services, strengthen the healthcare workforce, enhance healthy communities, and improve health equity. A key recommendation is that Congress should increase funding for 3,000 new residency positions over the next four years. These specialties include family medicine, geriatrics, general internal medicine, general surgery, pediatrics, and psychiatry.

ASCP would like HRSA to include pathology among the medical specialties requiring additional residency positions. The need for pathologists will continue to grow to meet the needs of an increasingly aging population. ASCP maintains that the availability of these positions is critical to encourage medical professionals to enter this specialty.

Interestingly, the Institute of Medicine will examine the issue of restructuring and financing in mid-December.

The Council on Graduate Medical Education (COGME) provides an ongoing assessment of physician workforce trends, training issues, and financing policies, and recommends appropriate federal and private sector efforts on these issues. COGME advises and makes recommendations to the Secretary of the U.S. Department of Health and Human Services, the Senate Committee on Health, Education, Labor and Pensions, and the House of Representatives Committee on Energy and Commerce.

ASCP continues to advocate for increased funding for Graduate Medical Education, and backs the American Association of Medical Colleges’ efforts to support H.R. 6352 and S. 1627. Both of these measures would increase federal support for GME enough to add 15,000 new training positions.

New Congress May Spur Greater Emphasis on Health Care

When the new Congress is seated in January, it will include many newcomers who are healthcare professionals as well as those with business ties to the healthcare industry. Both sides of the aisle will include representation from internal and emergency medicine; podiatric surgeons, social workers; and health policy analysts. It will be interesting to observe whether these newcomers weigh in with their expertise and enhance other members’ understanding of healthcare issues, such as the Affordable Care Act and other future healthcare legislation. For a list of the freshmen members with health-related backgrounds, click here.

Historically, there have always been members in both chambers with links to health care, such as former U.S. Sen. Bill Frist, MD (R-Tenn.), who began his career as a heart and lung transplant surgeon; U.S. Rep. Jim McDermott, MD (D-Wash.), who served as a psychiatrist before entering public life; and Rep. Donna Christensen, MD (D-U.S. Virgin Islands), who has been both an emergency room physician and an attending physician in a maternity ward. Will the influx of new Congressional members with healthcare backgrounds serve as a catalyst for meaningful healthcare initiatives? Only time will tell.

The response by ASCP and the Alliance of Integrity in Medicare (AIM) to the Government Accountability Office’s September report on the practice of self-referral garnered the attention of the American Board of Internal Medicine (ABIM) Foundation. Daniel Wolfson, ABIM’s Executive Vice President and Chief Operating Officer, recognized the response in a recent ABIM blog post. ASCP is a member of the AIM Coalition and the Choosing Wisely campaign—the ABIM Foundation’s campaign to create awareness among physicians, patients, and other healthcare stakeholders about appropriate test utilization to ensure better outcomes for patients. Sister medical societies, including the American College of Radiology and the American Society for Radiation Oncology, are also participants in the AIM Coalition and the Choosing Wisely campaign.

Supreme Court to Rule on Patentability of Human Genes

The U.S. Supreme Court announced late last month that it will hear Association for Molecular Biology v. Myriad Genetics, Inc., et al, the landmark lawsuit
challenging whether isolated human genes are patentable. The case questions Myriad Genetics’ right to patent BRCA 1 and BRCA2, two genes which correlate to increased rates of breast and ovarian cancer. The patents allow Myriad to be the exclusive U.S. commercial provider of screening assays for these genes and permit the company to determine the terms and price for testing, making it impossible for women to access alternate tests or obtain a second opinion about their results. The patents also give Myriad the authority to prohibit researchers from investigating these genes without first gaining permission.

The plaintiffs in the case, which include the American Society for Clinical Pathology (ASCP), petitioned the Supreme Court after a divided federal appeals court reaffirmed its ruling earlier this year, upholding Myriad Genetics’ right to patent BRCA 1 and BRCA2. It is important to note, however, that the Court has limited its grant of the appeal to only one of the three questions posed by the plaintiffs: “Are human genes patentable?” The Court will not address issues surrounding method claims or standing to sue.

The battle over the legality of gene patents began in 2009 when the American Civil Liberties Union (ACLU), representing numerous clients, including medical societies, researchers, patient advocates and patients, sued Myriad Genetics and the United States Patent and Trademark Office (USPTO). The key point of contention in the case, as it moved through the lower courts with a series of lengthy and contradictory rulings, has been the patentability of human genes. The plaintiffs argue that patents on human genes, which are “products of nature,” violate the First Amendment and patent law. Furthermore, such patents interfere with medical treatment and stifle scientific research.

It is expected that the Supreme Court will hear arguments in the spring and hand down a ruling as early as June 2013.